How U.S. Research Damning Electric Cars is Funded by Saudi Oil Interests – Barron’s

U.S. Department of Energy, Oak Ridge National Laboratory

Hidden in the hardwood forests of eastern Tennessee is a glass-and-steel American Wakanda of impulsed neutron beams, supercomputers, and atom probe microscopes. Here, at the U.S. Department of Energy’s Oak Ridge National Laboratory, Enrico Fermi and fellow scientists raced to develop the neutron bomb, and subsequent generations worked on the world’s-fastest computers, helped develop nuclear submarines and advanced spacecraft, analyzed greenhouse gas emissions, and made world-changing discoveries such as ribonucleic acid and the role of the Y chromosome.

One of ORNL’s latest studies warns that China’s policy of incentivizing electric-car production will lead to the creation of more carbon emissions during coming years than if Beijing were to instead encourage use of efficient gasoline engines.

Despite ORNL’s vaunted history there are reasons for a second look at this last bit of research. The China EV study, published in the scientific journal “Nature Communications,” was paid for by oil giant Saudi Aramco, which counts China as its largest customer and whose revenue depends upon the continued demand for oil. Some analysts say that Aramco’s role in producing the research is a potential conflict of interest, and that the relationship between Aramco and ORNL highlights a broader concern about how some companies fund scientific research at U.S. government facilities that directly supports their business interests.

ORNL was founded in 1943 as part of the Manhattan Project and has a current annual budget of $1.6 billion, making it one of the most significant research facilities on the planet. Its budget is approximately twice the annual funding for research at Harvard University.

With the end of the Cold War, the scientific establishment that grew from World War II pivoted further toward offering itself as a font of private-sector research and development where government science research, new technologies, and world-class facilities would bolster competitiveness on the commercial, rather than military, stage.

There is little transparency around private companies’ financial or other involvement in the U.S. Department of Energy’s research, including research produced at ORNL. ORNL, the Energy Department, and Aramco didn’t respond to questions about the amount and nature of Aramco project’s funding. A U.S. federal court has concluded ORNL isn’t bound by the U.S. Freedom of Information Act because it is managed for the government by a private contractor. Details of ORNL’s work with private corporations have come to light, however, when internal corporate records have been unearthed in lawsuits involving industries such as tobacco and chemicals. Such records show ORNL working step-by-step with industry representatives, including lobbyists.

The ORNL scientist leading the recent Aramco-funded project, however, said the company hasn’t meddled in his work.

“Yes, Aramco is an oil company, and they support our research, but they never impose their views,” said Zhenhong Lin, the ORNL director of the Aramco funded study of China’s EV market. “My understanding is they want to understand the future of the Chinese vehicle market so they can understand their demand for oil and other energy.”

Some academic research departments have taken a strict line on working with Aramco. Staff at universities such as Massachusetts Institute of Technology and Harvard have protested against taking Saudi money because of the country’s human rights reputation, with MIT in September 2020 moving to exclude Saudi Aramco from energy research programs.

“I would think twice about taking money from Saudi Aramco,” said Venkatesh Narayanamurti, previously head of Harvard’s engineering and applied sciences school, and former vice president for research at ORNL’s sister institute, Sandia National Laboratories.

Because Saudi Aramco is a government firm, having the U.S. Department of Energy perform its policy research raises ethical questions, said Narayanamurti.

“Saudi Arabia, politically, it’s quite a brutal regime,” he said.

Robert Alvarez, who from 1993 to 1999 was a senior U.S. Department of Energy official with oversight over science operations, said that such a sensitive government-to-government deal should have received top diplomatic vetting.

“I suspect this is an example of lack of adult supervision in the national laboratories,” he said.

An ORNL spokeswoman referred questions to Aramco Research Center-Detroit, the division directly funding the ORNL project.

That division is dedicated to the sort of efficient gasoline engine ORNL’s report said would help solve China’s greenhouse gas problems. Its engineers develop energy-saving internal combustion technologies to protect the oil giant’s market share against transport electrification, the Aramco facility’s chief told The Wall Street Journal in 2018. A Saudi Aramco spokesperson said the company had no comment.

The ORNL EV study “Greenhouse gas consequences of the China dual credit policy” calculated that China’s method for reaching its 2035 goal of eliminating sales of traditional gasoline powered vehicles could stumble in reducing pollution during that the coming decade, thanks to the unintended consequences of rewarding EV production by doling out “credits” allowing manufacturers to make traditional cars. Manufacturers are likely to maximize profit from these limited quotas by prioritizing big-ticket gas-guzzlers, the report said. The combination of more gasoline-hungry engines and rapidly increased EV production would create more pollution than a shift to more efficient gasoline engines, the report concluded.

Other analysts have also questioned China’s EV policies. But the ORNL study’s focus is very closely aligned with Aramco’s official position.

“It would be no surprise that people are going to try and shape conclusions and public opinion to serve their own strategic interest, and I think their interests are very clear, and that is to maintain a more carbon intensive system for decades to come,” said Joseph Britton, head of the EV trade group Zero Emission Transportation Association.

Stakes are high. The European Union, Japan, Korea and 110 other countries have pledged carbon neutrality by 2050. China says it will do so before 2060, extending $100 billion thus far in EV subsidies.

Investors have noticed, with shares in Chinese EV manufacturers such as NIO and Xpeng following Tesla stock higher in recent months.

Saudi Aramco is the world’s sixth-largest company by revenue, reporting $259 billion in 2019, a year when it was China’s largest source of crude oil. In the prospectus for the company’s November 2019 initial public offering, Saudi Aramco repeated five times the warning that electric vehicles would pose a business risk, or a threat to oil demand. Aramco and its officials in advertisements, speeches and interviews have urged sticking with petroleum.

“Carbon emissions can be reduced as a result of efficiency introduced by the industry, in a much higher proportion than renewables and electric vehicles can,” said Saudi Aramco Chief Executive Amin Nasser in an interview posted in December 2020 on the website of the French oil company Total.

“My encounters in Davos showed me that fewer and fewer of our stakeholders accept logic and facts, least of all from us,” he said at a 2019 London energy conference.

Aramco and the Saudi government have spent lavishly on their own research centers in 11 countries, while sponsoring additional research at universities and at U.S. government research centers. The academic publications database Crossref shows 472 journal articles published from Aramco sponsored research since 2015. That outstrips other oil companies—the British energy giant BP Global sponsored research resulting in 49 papers in the Crossref database, with Shell Oil behind 33 such papers.

U.S. universities reported receiving $34 million in contract payments from Saudi Aramco between 2014 and 2019, according to U.S. Department of Education data. A search of the U.S. Department of Energy’s database of its research publications shows more than 150 articles based on work either funded by Aramco, co-written by Aramco employees, or involving Aramco collaboration since 2008. Topics included gasoline-engine efficiency, carbon capture, and most recently, the shift to electric vehicles by Aramco’s largest customer, China.

Oil companies have forged differing responses to climate change. Companies such as BP and Shell tout forays into alternate energy, for instance Saudi Aramco has largely advocated remediating petroleum pollution with new technologies. Some of these claims are overblown, said Jonathan White, climate program lawyer for the U.K. environmental group ClientEarth. Last year, Aramco withdrew “sustainability” advertisements after being contacted by the U.K.’s Advertising Standards Authority over complaints they were misleading, he noted.

He said that Saudi Aramco’s efforts with ORNL is “a coordinated campaign to make the research match the publicity.”

Energy Department research centers in the U.S. have faced criticism for taking funding from vested interests in the past.

Tobacco companies during the 1990s and 2000s paid ORNL hundreds of thousands of dollars for studies on the effects of secondhand smoke, in at least one case hiring an industry-sponsored ORNL researcher as an expert witness to testify at trial. A judge tossed the testimony, saying it reminded him of “having the fox in the henhouse.”

Kathryn Mulvey, head of the Union of Concerned Scientists corporate accountability campaign, said she sees parallels between tobacco-funded research and the prominent role that oil companies, including Aramco, currently play sponsoring university and government science.

“These certainly look like pages out of the playbook that the oil-and-gas industry has perfected for decades, picking up plays from the tobacco and other industries that sought to perpetuate harmful practices and gain undue influence over policy markets, and setting the research agenda,” she said.

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